Steve McCann
American Thinker
11/19/2010
Ireland, a country to which nearly 40 million Americans can trace their ancestry, is on the brink of insolvency and a loss of sovereignty.
In the 1990s and the early part of this decade, Ireland’s growth rate had earned it the nickname of “the Celtic Tiger.” Supported by EU budget assistance, low corporate tax rates, and a labor force boosted by a spike in the working-age population, it became a key European location for U.S. foreign investment. The economic story of the 1990s was largely about export growth, but the growth of the mid-2000s, by contrast, was driven by large-scale construction and real estate investment utilizing historically low interest rates.
Nearly all of this boom was financed with borrowed cash. From 2003 to 2007, the Irish banking system imported funds equivalent to over 50% of the nation’s Gross Domestic Product, thus triggering a runaway real estate and construction bubble.
Cheap loans, with a tacit nudge by the government, were virtually forced upon the Irish people. Mortgages amounting to 120% of the cost of overpriced apartments were taken out, with the cash left over used to purchase new cars or other consumer items. Consumers became dangerously indebted, as Irish household borrowing (2009) stood at $43,200, nearly twice the eurozone average.
Politicians, heady with the gusher of tax receipts this boom created, could not control their penchant for spending, as their salaries and pensions, as well as entitlement spending, were dramatically increased. Public-sector employment grew by a staggering 40% since the year 2000.
New hotels, offices, and shopping centers (which were not needed) sprang up throughout much of the country. There appeared to be no end in sight as the government and banking system worked hand in hand promoting policies that created a massive financial bubble.
The world financial crisis put an end to these excesses, and the boom came to a halt practically overnight…
…the Irish people, who trusted in their leaders, their banking system, and assurances made to them by the European Union, will bear the brunt, as their country will now be subject to the vagaries of bureaucrats in Strasbourg and various capitals throughout Europe. The Irish people, who for centuries struggled against England for independence and to preserve their culture, deserve far better than this, as they will struggle for years, and perhaps decades, to get out from under these burdens.
The Irish experience should also serve as a wake-up call to American citizens, as many leaders around the world and in the United States are determined to create a new, highly centralized global financial system and government with the stated goal of ending state sovereignty.
Read the entire article at the American Thinker.
Update: Also at Investors.com, Baptism of Eire
